Silence Therapeutics plc Goodwill & Intangibles Disclosure
9. Goodwill
Goodwill is assessed annually at a reporting unit level, or whenever events and circumstances indicate impairment may have occurred. The Group has one reporting unit and performs a qualitative impairment test (also known as “Step 0"), and when necessary, a quantitative test. After assessing the totality of events and circumstances as part of the Step 0 test, it was determined that it is not more likely than not (a likelihood that is more than 50%) that the fair value of the reporting unit is less than its carrying amount and therefore a quantitative test is unnecessary. No triggering events were identified during the year.
The following table presents the changes in the carrying amount of goodwill:
|
|
Year ended December 31, |
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|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
$000s |
|
|
$000s |
|
||
Balance at start of year |
|
|
9,981 |
|
|
|
9,683 |
|
Translation adjustment |
|
|
(589 |
) |
|
|
298 |
|
Balance at end of year |
|
|
9,392 |
|
|
|
9,981 |
|
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.